How to Raise Your Prices Without Losing Work

When clients accept your rate increase but send you less work

Before encouraging my mentees to raise their rates with a client, I usually get them to consider the worst-case scenario. I ask them to think about what they’d do if the client said they couldn’t afford to pay more and how they’d deal with a negative response to their price increase.

Most people consider the best-case scenario to be the client accepting their rate increase outright, which can and does often happen. However, alongside that acceptance, you might see the amount of work the client sends you decrease, sometimes substantially.

In such circumstances, perhaps the best-case scenario would actually be for the client to negotiate with you to a level they can comfortably afford, and that still works for you, so the workload doesn’t reduce. That is, of course, if you weren’t increasing your prices to reduce the amount of work you receive because you already have too much on your plate!

Whatever your situation, in this blog post, I’m looking at how you can reduce the risk of clients accepting your increase but sending you less work when this isn’t your desired outcome. This post was inspired by a conversation I had with a mentee the other day, so I hope you’ll find it useful.

Why do clients accept your rate increase then send you less work?

It’s useful to know why this happens as, once we’ve understood the reason, we can take action to mitigate the risk of it happening to us.

Customers often agree outright to a rate increase because they value the work you do and respect you as a service provider. They might not want to try to negotiate or push you down on price because they genuinely believe your services are worth what you are asking for. If you think about it this way, it’s actually a really nice situation to find yourself in.

Having said that, if the client’s budget hasn’t increased but has stayed the same, it’s logical that the total amount of work they’ll be able to afford from you will be lower. This is particularly the case when you’re working with larger companies and corporations. Different departments are given different budgets to work with each year, and they have to stay within their allocated funds.

Why it isn’t necessarily a problem if your customer ends up sending you less work

As touched on above, receiving less work from a customer might actually be a good thing for you.

We often raise our rates because we want our billable time to be better compensated, meaning that every hour we spend on client work is more worthwhile. If the client agrees to your rate increase, that goal is being achieved. Every hour you spend on work for them will be better remunerated and more financially worthwhile than it used to be.

Simultaneously, you’ll also have more time available when you aren’t working on that particular client’s projects. Time that you wouldn’t have had if you were still providing your services at your previous rate.

You can use this extra time however you want, whether you dedicate it to your business or your personal life. You might want to spend more time with family and friends or looking after yourself, or you might want to complete a personal project. If you decide to use the time in your business, you could spend it doing work for other clients or marketing to new clients who are also able to pay your higher rates.

Think about it this way: if you carry on working for the client at the same rate, you’ll be doing the same amount of work and earning the same amount of money. If you work for them at a higher rate and end up doing less work, you’ll be able to look for a new client who will be able to pay the same rate (or more!). In the long term, this will lead to a higher income for you overall.

It all really depends on what you want for yourself and your business. If you raise your rates with a customer and they send you fewer projects, you’ll have more freedom and flexibility, which isn’t necessarily a bad thing.

How can you reduce the risk of a client sending you less work?

Having said that, if you aren’t working to capacity and you need all the paid work you can get, you might want to reduce the risk of this happening.

One thing you can do to avoid clients sending you less work when you raise your prices is to try to find out when their financial year starts and finishes. If your clients are companies, they’re likely to work to a financial year that starts and ends in a certain month. They’ll redo their budgets just before their new financial year begins, which isn’t necessarily aligned with the calendar year.

You might need to ask your client when their financial year starts and finishes. Or you might be able to find out online. Some companies publish their financial statements for public viewing on their websites, so if you can find these, you’ll know when their financial year begins and ends.

Once you’ve discovered this information, inform your client of your rate increase before their financial year ends. Make sure they have enough time to consider your higher rates in their budget for the coming financial year. This way, they’ll be able to allocate a higher amount for your services, knowing that they’re going to cost more.

What you should be doing alongside raising your rates with your existing clients

When you’ve decided that you need to be charging higher rates, start quoting them to new potential clients straight away. It’s always easier to get new clients to pay higher rates than it is to raise your rates with existing clients and maintain the same workload.

If you get new clients coming through the door at your higher rates, this means that if your workload does drop off with an existing client when you increase your prices, the difference will already be accounted for. And you might even end up being better off!

It’s important to start charging higher rates to new clients as soon as possible so you can ensure your overall earnings don’t suffer when you raise your prices with existing clients.

I hope you find these tips helpful the next time you decide to increase your rates. If you think it might be time for you to raise your prices but you aren’t really sure how to go about it, Charge with Confidence might be a good fit for you.

During the programme, we’ll look at exactly how much you need to be increasing your prices by before assessing how to go about it. We’ll evaluate each of your clients individually so you have a complete overview of the current situation and can make an informed decision on what needs to change and how you want to proceed.

I offer Charge with Confidence both 1:1 and as part of a group. Click on the link below to see which format feels right for you.

Find out more about Charge with Confidence